AGENDA REPORT

City of Santa Clara, California

Agenda Item #

5C—&
Santa Clara
AlAnierica City

I iiir
2001

Date: To: From:

November 30, 2012 Interim City Manager for Council Action Council Officers and Elected Full-Time Employees Performance/Salary Review Committee Approval of Employment Agreement Between the City of Santa Clara for the position of City Manager

Subject:

EXECUTIVE SUMMARY:
The City Council selected an executive search firm to conduct the recruitment for the City of Santa Clara's City Manager. The firm conducted an extensive search and facilitated the recent interviews for the position of City Manager. The Council Officers and Elected Full-Time Employees Performance/Salary Review Committee is recommending the appointment of Mr. Julio Fuentes to the position of City Manager. The proposed Employment Agreement is attached. On November 15, 2012, the Council Officers and the Elected Full-time Employees Performance/Salary Review Committee met, and they recommend that the City Council appoint Mr. Julio Fuentes to the position of City Manager at an annual salary of $290,000. The attached Employment Agreement spells out the terms and conditions of employment. Mr. Fuentes will also receive all the terms and conditions as outlined in the Unclassified Management Employees' Unit 9 Memorandum of Understanding (December 14, 2008 — December 24, 2011), and the Agreement on Amendment and Extension to the Memorandum of Understanding for Unit 9 (December 26, 2010- December 21, 2013) with the exception of the Mobile Communications Device Stipend and annual Professional Development/Non-Recoverable Health Services reimbursement, both of which Mr. Fuentes declined. In addition, Mr. Fuentes will receive a vacation accrual rate of twenty one (21) days per year, a vacation and sick leave bank of ten (10) days each, a Moving and Housing Allowance (specifically for the first year of his employment), an agreed upon auto allowance and a severance benefit not to exceed twelve (12) months. Mr. Fuentes has served as the City Manager for the City of Alhambra for twenty years. Prior to that time he was employed by the City of Pomona for three years, as their City Manager. He is a graduate of California State University Long Beach, and received his Masters of Public Administration from the University of Southern California.

ADVANTAGES AND DISADVANTAGES OF ISSUE:
Approving this Employment Agreement will fill the key executive position of City Manager following an extensive recruitment process. There are no known disadvantages.

Interim City Manager for Council Action Subject: Approval of Employment Agreement Between the City of Santa Clara and for the position of City Manager November 30, 2012 Page 2
ECONOMIC/FISCAL IMPACT:

In preparing the 2012-13 budget, the salary and benefits for this position were taken into consideration. There is no additional impact except for administrative time and expense of the recruitment process.
RECOMMENDATION:

That the Council approve and authorize the Mayor and Interim City Manager to execute the Employment Agreement between the City of Santa Clara and Mr. Julio Fuentes, with his effective employment date of February 4, 2013, which agreement sets the salary and conditions of employment pursuant to the recommendation of the Council Officers and the Elected Full-time Employees Performance/Salary Review Committee.

Jamie L. Matthews Kevin Moore Mayor Member City Council Chairperson, Council Officers and Committee Member Elected Full-Time Employees Performance/Salary Review Committee

Lisa Gillmor City Council Member Committee Member

iforpRoVE
nald E. Garratt Iiterim City Manager

Documents Related to this Report: I) Employment Agreement, including Exhibits, Between the City of Santa Clara and Julio Fuentes
Iicitymanager/agenda reports/2012/City Manager Employment Agreement. doc

EMPLOYMENT AGREEMENT BETWEEN CITY OF SANTA CLARA AND JULIO FUENTES
This EMPLOYMENT AGREEMENT is made by and between the City of Santa Clara, California, a chartered California municipal corporation ("City") and Julio Fuentes ("Employee" or "Fuentes") as of December 4, 2012. RECITALS This Agreement is entered into on the basis of the following facts, among others: City, acting with the approval of its duly elected City Council, desires to appoint and A. employ Julio Fuentes as its City Manager subject to the terms and conditions set forth in this Agreement, the Santa Clara City Code and the Charter of the City of Santa Clara (the "Charter"). The Charter provides, among other things, that the City Manager shall be appointed by, B. and serve at the pleasure of the City Council. Employee desires to be employed by the City as its City Manager, subject to the teal's C. and conditions set forth in this Agreement, the Charter and the Santa Clara City Code. City and Employee desire to establish specific terms and conditions relating to D. compensation, including salary and benefits, performance evaluations and related matters. AGREEMENT BASED UPON THE FOREGOING, CITY AND EMPLOYEE AGREE AS FOLLOWS: Employment. City Council appoints and employs Employee as City Manager with the 1. City of Santa Clara and Fuentes accepts the appointment and employment. Employee acknowledges and agrees that as City Manager, Fuentes serves in an at-will capacity, with no expectation of continued employment, and with no right to pre-or-post-separation due process or appeal. Such appointment and employment shall be effective on February 4, 2013. Duties of the City Manager. Employee shall perform the duties established for the City 2. Manager by the Charter, Santa Clara City Code, City Council and any applicable law, ordinance or regulation. 2.1 Full Energy and Skill. Employee shall devote his full energy, skill, ability, and productive time to the performance of the "Duties of the City Manager" referenced herein. Conflict. Employee shall not engage in any employment, activity, consulting service, or other enterprise, for compensation or otherwise, which is actually or potentially in conflict with, inimical to, or which interferes with the performance of the "Duties of the City Manager" described herein. Fuentes acknowledges that he is subject to the various conflict of interest requirements found in the
Page 1 of 6

2.2

Employment Agreement

California Government Code and other applicable state and local policies and regulations concerning conflicts of interest. 2.3 Code of Ethics and Values. Employee shall adhere to the City of Santa Clara's Code of Ethics and Values, a copy of which is attached as Exhibit A and incorporated herein. Permission Required For Outside Activities. Employee shall not engage in any employment, activity, consulting service, or other enterprise, for compensation or otherwise, without the express, written consent of the City Council. Professional Activities. During Fuentes' appointment as City Manager, he may attend and/or participate in professional activities, including but not limited to meetings, conferences and other events conducted or sponsored by the League of California Cities provided that his ability to perform the "Duties of the City Manager" described herein is not compromised. Fuentes shall be paid regular salary and benefits while traveling to, attending, or participating in professional activities, and shall be entitled to expense advances in accordance with City policy applicable to other Council-appointed officers. Subject to annual appropriation and any limitations in any Council-adopted travel policy, Employee is entitled to reimbursement for the actual costs of the following expense categories that he incurs as a result of the Professional Activities authorized in this section: airfare, rental car (if necessary), conference fees and lodging. Employee shall inform the City Council in advance of absences of more than one day related to such Professional Activities. Employee shall also serve as Contract Administrator for the Sports & Open Space Authority, Executive Director for the Housing Authority, Executive Director for the Stadium Authority, Staff Chair for the Economic Development Team, Executive Director for the Bayshore North Project Enhancement Authority and Executive Director for the Successor Agency to the Redevelopment Agency.

2.4

2.5

2.6

Compensation. While performing the duties of City Manager, Employee shall be 3. compensated as provided in this section. 3.1 Salary. Employee shall receive an annual salary of Two Hundred Ninety Thousand Dollars ($290,000) less all authorized or appropriate deductions and withholdings, payable in pro-rata increments on regular City paydays, commencing on the first day of employment. City and Fuentes agree that the amount of his annual salary shall not decrease, except as part of a decrease that is applicable to either all Council-appointed officers, the City Attorney, Police Chief and the City Clerk-Auditor or is applicable to all City Miscellaneous Unclassified Management Employees in Unit 9. Such decrease shall be effective when approved by the City Council. Regular Benefits and Allowances. Except as otherwise specified in this Agreement, Employee will be eligible for, and shall receive, the benefits provided

3.2

Employment Agreement

Page 2 of 6

by Section 3 to Section 6, Section 8 to Section 18 and Section 22 to Section 25 of the Miscellaneous Unclassified Employees' Memorandum of Understanding for Unit 9, as amended and extended for the period December 26, 2010 to December 21, 2013, and any future amendments thereto or successor Memoranda of Understanding governing the same benefits. Copies of the Miscellaneous Unclassified Employees Unit 9 Memorandum of Understanding, for the period December 14, 2008 to December 24, 2011, and the Agreement on Amendment and Extension to Memorandum of Understanding are attached as Exhibit B and incorporated herein. 3.3 Moving and Housing Allowance. City shall reimburse Fuentes up to a maximum of Twenty-nine Thousand Dollars ($29,000) to be used by Fuentes for moving expenses and/or temporary housing in Santa Clara through January 2014, provided Fuentes provides City with receipts documenting such expenses and that they were incurred in connection with his performance of his duties as City Manager. Adjustments. Periodically, the City Council shall meet with Employee for the express purpose of determining any appropriate salary adjustment, but the ultimate decision in regard to the timing and the amount of any adjustment is within the sole discretion of the City Council. Although the position of City Manager is not in Unit 9, Employee shall be subject to all adjustments to salary and benefits for Miscellaneous Unclassified Employees in Unit 9, including the unpaid furlough days provided for in the December 26, 2010 to December 21, 2013 Memorandum of Understanding. 3.5 Vacation Accrual. Notwithstanding Section 3.2, Fuentes' annual accrual and maximum accrual of vacation pursuant to Section 8.D of the December 14, 2008 to December 24, 2011 Memorandum of Understanding ("MOU") shall assume he has ten years' of completed service as of the date he commences employment. In addition, effective the first day of employment, Fuentes will have a vacation bank of 10 days and a sick leave bank of 10 days. Auto Allowance. Fuentes shall be entitled to an automobile allowance in the amount of $6,460.00 annually. Cell Phones. Fuentes shall not receive a mobile communication device allowance as is provided in Section 11 of the MOU. Professional Development/Non-Recoverable Health Services. Fuentes shall not receive Professional Development/Health Reimbursement Allocation. Deferred Compensation. Fuentes shall be entitled to participate in a deferred compensation plan in accordance with standard City policy for all employees.

3.4

3.6 3.7 3.8 3.9

Performance Appraisal. Periodically, the City Council shall meet with Employee for the 4. express purpose of evaluating Fuentes' performance as City Manager.
Employment Agreement Page 3 of 6

5. Additional Expenses of Employment. City shall pay the following usual and customary employment expenses: 5.1 The costs of any fidelity or other bonds required by law for Employee.

Duration of Employment and Severance Pay. Fuentes understands and agrees that he has 6. no constitutionally protected property or other interest in continued employment as City Manager. Fuentes understands that notwithstanding any other applicable laws, resolutions and policies, he has no right to pre-or post-disciplinary due process. Fuentes further understands and agrees that he works at the will and pleasure of the City Council and that he may be terminated at any time, with or without cause. Employee may terminate this agreement by voluntary resignation upon thirty (30) calendar days' written notice to the City Council. In the event that the City Council terminates Employee's employment as City Manager for no reason or for reason other than cause and Employee agrees to sign and deliver to the City Council a general and full release of all claims against the City, including without limitation its current and former elected officials, officers, agents and employees, in a form satisfactory to the City Council, and Employee does deliver such a release, Employee shall receive severance pay equal to twelve months of his annual salary as set forth in Section 3.1 or as such annual salary may have been adjusted as of the date he signs the release, which shall be deemed to be the unpaid balance of Employee's salary for purposes of City Charter Section 806 and California Government Code Section 53260. The payment of such severance pay shall not include the value of benefits or any other form of payment. Nothing in this agreement shall be construed or interpreted to provide Employee with a right of appeal from termination of Employee's employment pursuant to the City's Civil Service Rules or on any other ground. For purposes of this section, "cause" shall be defined as:
(a) Conviction of a felony or a misdemeanor involving moral turpitude; (b) Continued abuse of non-prescription drugs or alcohol that materially affects the performance of the City Manager's duties; or (c) Willful abandonment of duties or repeated and protracted unexcused absences from the City Manager's office and duties. 7.

Miscellaneous.
7.1

Indemnity: In accordance with and to the extent provided by the California Tort
Claims Act (Government Code Secs. 825, et seq.) and Government Code Secs. 995-996.5, the City shall defend and indemnify the City Manager against and for all losses sustained by the City Manager in direct consequence of the discharge of the City Manager's duties on the City's behalf for the period of the City Manager's employment. This section shall be equally applicable to each City related entity as though set forth in an indemnity agreement between the City Manager and that legal entity. The City hereby guarantees the performance of this indemnity obligation by the City related entity and shall indemnify and hold the City Manager harmless against any failure or refusal by the City related entity to perform its obligations under this Section. Further, if the City provides funds for

Employment Agreement

Page 4 of 6

legal criminal defense pursuant to this subsection and the terms of the Government Code, City Manager shall reimburse the City for such legal criminal defense funds if City Manager is convicted of a crime involving an abuse of office or position, as provided by Government Code Secs. 53243-53243.4. 7.2
Notices. Notices given under this Agreement shall be in writing and shall be

either: (a) (b) (c) (d) served personally; or sent by facsimile (provided a hard copy is mailed within one (1) business day); or delivered by first class United States mail, certified, with postage prepaid and a return receipt requested; or sent by Federal Express, or some equivalent private mail delivery service.

Notices shall be deemed received at the earlier of actual receipt or three (3) days following deposit in the United States mail, postage prepaid. Notices shall be directed to the addresses shown below, provided that a party may change such party's address for notice by giving written notice to the other party in accordance with this subsection. For City: Attention: Mayor City of Santa Clara 1500 Warburton Avenue Santa Clara, CA 95050 Julio Fuentes 300 North Granada Avenue Alhambra, CA 91801

For Employee:

7.3

Recitals/Entire Agreement/Amendment. The foregoing Recitals are true and

correct and are a part of this Agreement. This Agreement constitutes the entire understanding and agreement between the parties as to those matters contained in it, and supersedes any and all prior or contemporaneous agreements, representations and understandings of the parties. This Agreement may be amended at any time by mutual agreement of the parties, but any such amendment must be in writing, dated and signed by the parties and attached hereto. 7.4
Applicable Law and Venue. This Agreement shall be interpreted according to the

laws of the State of California. Venue of any action regarding this Agreement shall be in the Santa Clara County Superior Court. 7.5
Severability. In the event any portion of this Agreement is declared void, such portion shall be severed from this Agreement and the remaining provisions shall remain in effect, unless the result of such severance would be to substantially alter
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Employment Agreement

this Agreement or the obligations of the parties, in which case this Agreement shall be immediately terminated. 7.6 Waiver. Any failure of a party to insist upon strict compliance with any term, undertaking or condition of this Agreement shall not be deemed to be a waiver of such term, undertaking or condition. To be effective, a waiver must be in writing, signed and dated by the parties. Representation by Counsel. Employee and City acknowledge that they each did, or had the opportunity to, consult with legal counsel of their respective choices with respect to the matters that are the subject of this Agreement prior to executing it. Section Headings. The headings on each of the sections and subsections of this Agreement are for the convenience of the parties only and do not limit or expand the contents or any such section or subsection.

7_7

7.8

The Parties acknowledge and accept the terms and conditions of this Employment Agreement as evidenced by the following signatures of their duly authorized representatives. It is the intent of the Parties that this Agreement shall become operative on the Effective Date first set forth above. CITY OF SANTA CLARA, CALIFORNIA a chartered California municipal corporation
APPROVED AS TO FORM:

By: RICHARD E. NOSKY, Jr, City Attorney
ATTEST:

JAMIE L. MATTHEWS Mayor By: RONALD GARRATT Interim City Manager 1500 Warburton Avenue Santa Clara, CA 95050 Telephone: (408) 615-2210 Facsimile: (408) 241-6771

ROD DIRIDON, JR. City Clerk

Attachments: Exhibits A, B
1710830.6

Employment Agreement

Page 6 of 6

Santa Clara

All-America City 111111,
2001

City of Santa Clara, CA Code of Ethics and Values
PREAMBLE The proper operation of democratic government requires that decision-makers be independent, impartial, and accountable to the people they serve. The City of Santa Clara has adopted this Code of Ethics and Values to promote and maintain the highest standards of personal and professional conduct in the City's government. All elected and appointed officials, City employees, volunteers, and others who participate in the city's government are required to subscribe to this Code, understand how it applies to their specific responsibilities, and practice its eight core values in their work. Because we seek public confidence in the City's services and public trust of its decision-makers, our decisions and our work must meet the most demanding ethical standards and demonstrate the highest levels of achievement in following this code.

1. As a Representative of the City of Santa Clara, I will be ethical. In practice, this value looks like:
a.) I am trustworthy, acting with the utmost integrity and moral courage. b.) I am truthful, do what I say I will do, and am dependable.
c.) I make impartial decisions, free of bribes, unlawful gifts, narrow political interests, and financial and other personal interests that impair my independence of judgment or action, d.) I am fair, distributing benefits and burdens according to consistent and equitable criteria. e.) I extend equal opportunities and due process to all parties in matters under consideration. If I engage in unilateral meetings and discussions, I do so without making voting decisions.

f.) I show respect for persons, confidences, and information designated as "confidential."
g.) I use my title(s) only when conducting official City business, for information purposes, or as an indication of background and expertise, carefully considering whether I am exceeding or appearing to exceed my authority. 2.

As a Representative of the City of Santa Clara, I will be professional. In practice, this value looks like:
a.) I apply my knowledge and expertise to my assigned activities and to the interpersonal relationships that
are part of my job in a consistent, confident, competent, and productive manner.

b.) I approach my job and work-related relationships with a positive attitude.
c.) I keep my professional knowledge and skills current and growing. 3.

As a Representative of the City of Santa Clara, I will be service-oriented. In practice, this value looks like:
a.) I provide friendly, receptive, courteous service to everyone.
b.) I am attuned to, and care about, the needs and issues of citizens, public officials, and city workers, c.) In my interactions with constituents, I am interested, engaged, and responsive.

4. As a Representative of the City of Santa Clara, I will be fiscally responsible In practice, this value looks like:
a.) I make decisions after prudent consideration of their financial impact, taking into account the long-term financial needs of the City, especially its financial stability. b.) I demonstrate concern for the proper use of City assets (e.g., personnel, time, property, equipment, funds) and follow established procedures.

c.) I make good financial decisions that seek to preserve programs and services for City residents.
5.

As a Representative of the City of Santa Clara, I will be organized. In practice, this value looks like:
a.) I act in an efficient manner, making decisions and recommendations based upon research and facts,
taking into consideration short and long term goals. b.) I follow through in a responsible way, keeping others informed, and responding in a timely fashion. c.) I am respectful of established City processes and guidelines.

6.

As a Representative of the City of Santa Clara, I will be communicative. In practice, this value looks like:
a.) I convey the City's care for and commitment to its citizens. b.) I communicate in various ways that I am approachable, open-minded and willing to participate in dialog. c.) I engage in effective two-way communication, by listening carefully, asking questions, and determining an appropriate response which adds value to conversations.

7.

As a Representative of the City of Santa Clara, I will be collaborative. In practice, this value looks like:
a.) I act in a cooperative manner with groups and other individuals, working together in a spirit of tolerance and understanding.

b.) I work towards consensus building and gain value from diverse opinions. c.) I accomplish the goals and responsibilities of my individual position, while respecting my role as a
member of a team.

d.) I consider the broader regional and State-wide implications of the City's decisions and issues.

8. As a Representative of the City of Santa Clara, I will be progressive. In practice, this value looks like:
a.) I exhibit a proactive, innovative approach to setting goals and conducting the City's business. b.) I display a style that maintains consistent standards, but is also sensitive to the need for compromise,
"thinking outside the box," and improving existing paradigms when necessary. c.) I promote intelligent and thoughtful innovation in order to forward the City's policy agenda and City services.

Approved by City Council on April 4, 2000; modified by Council on August 21, 2001

2

AGREEMENT ON AMENDMENT AND EXTENSION TO MEMORAVIDUM OF UNDERSTANDING
between

CITY OF SANTA CLARA
and

CITY OF SANTA CLARA MISCELLANEOUS UNCLASSIFIED EMPLOYEES ASSOCIATION UNIT 9

DECEM7711 26, 2010 - DECEMBER 21, 2013

AGREEMENT ON AMENDMENT AND EXTENSION TO MEMORANDUM OF UNDERSTANDING BETWEEN CITY OF SANTA CLARA AND MISCELLANEOUS UNCLASSIFIED EMPLOYEES (UNIT 9) 12/26/10 - 12/21/13
The City of Santa Clara (City) and the Santa Clara Miscellaneous Unclassified Employees (Unit 9) have agreed to amend and extend the current 12/08 — 12/11 Memorandum of Understanding (current MOU) between them as follows: 1 The amended MOU would expire on 12/21/13 instead of 12/24/11

For the MOU year beginning 12/26/10): The paragraph within Section 2 of 2. the current MOU entitled "Year 3(12/10 — 12/11), including the scheduled compensation adjustment described there, would no longer be effective and would be replaced by the following terms and conditions: o o There would be no change in salaries, i.e. a "flat" year on salary. Employees would take ninety-six (96) unpaid furlough hours by December 24, 2011. For this MOU year, as well as in subsequent MOU years in which unpaid furlough hours are taken, the following shall apply: So that employees will not experience a significant pay reduction in the weeks in which employees take unpaid furloughs, the furloughs will be implemented by reducing employees' pay beginning the first full pay period in January 2011 by the percent necessary to achieve the 96 hours of unpaid furlough hours each MOU year. Furlough hours shall count as "hours worked" for purposes of accruals, eligibility for City contributions for health and eligibility for overtime (if applicable), and will not impact the amount of an employee's compensation the City reports to CalPERS. Furlough hours may not be cashed-out. Requests to use banked furlough hours shall be made to the same persons as requests are made to use vacation hours. • An employee otherwise following the furlough calendar may be required to work on a furlough calendar day if operationally required and instead bank the corresponding 8 hours to be used on another date. Employees separating employment during the term of the MOU will have their final paycheck adjusted so that they either are credited

Agreement on Amendment and Extension to MOU Between City and Miscellaneous Unclassified Management 12/26/10 — 12/21/13 Page 2

(i.e. an addition to their final paycheck) or required to pay back (i.e. a deduction from their final paycheck) the pro rata number of furlough hours they have either taken in excess of, or fewer than, the number of furlough hours thus far deducted from the employees paychecks in the applicable MOU year. The PERS increase from FY 2009-10 to FY 2010-11 would not adversely impact salaries of Unit 9 employees. 0 The City will pay any increase in the cost of the Kaiser employee only rate for the 2011 calendar year and this increase will not have an adverse effect on the salaries of Unit 9 employees. The Salary Adjustment Form and "Total Compensation" methodology described in Sections 1 and 2 of the 12/08-12/11 IVIOU would not be used in this MOU year to determine salary (which salary would not change from the prior year) or other element of compensation, and there would be no change to any discretionary allocation from the prior year on the Salary Adjustment Form. All other terms and conditions in the 12/08-12111 MOU between the City and Unit 9 would remain in place except as/if needed to be consistent with this Agreement (for example, the discussion in Sections 1.B, 1.C. regarding salary and total compensation adjustments during the term of this MOU would not be applicable given the parties' agreement on this amendment and extension to the MOU as well as the sentence in Section 27 that states that Unit 9 would submit proposals for a subsequent MOU no later than November 2, 2011). 0 Unit 9 agrees to meet and discuss during the 2011 calendar year the subject of pension reform, including but not limited to the possibility of a 2nd tier retirement plan for future new hires as well as a discussion of Social Security. This agreement by Unit 9 does not constitute agreement to a "re-opener" on the subject of pension reform, and the City would not have the right to impose any change to the pension formula of classifications represented by Miscellaneous Management as part of or as a result of these discussions. For the MOU year beginning 12/25/11: The following terms and conditions would apply, subject to the contingency set forth below: There would be no change in salaries, i.e. a "flat" year on salary. Employees would take ninety-six (96) unpaid furlough hours by December 22, 2012. (See Paragraph No. 2 regarding specifics related to furloughs)

0

3.

Agreement on Amendment and Extension to MOU Between City and Miscellaneous Unclassified Management 12/26110 — 12/21/13 Page 3

o

A PERS increase in the PERS rate from FY 2010-11 to FY 2011-12 would not adversely impact salaries of Unit 9 employees, The City will pay any increase in the cost of the Kaiser employee only rate for the 2012 calendar year and this increase will not have an adverse effect on the salaries of Unit 9 employees. The Salary Adjustment Form and "Total Compensation" methodology described in Sections 1 and 2 of the 12/08-12/11 MOU would not be used in this MOU year to determine salary (which salary would not change from the prior year) or other element of compensation, and there would be no change to any discretionary allocation from the prior year on the Salary Adjustment Form, All other terms and conditions in the 12/08-12/11 MOU between the City and Unit 9 would remain in place except as/if needed to be consistent with this Agreement.

O

o

a

Contingency Requirement: The City has estimated and projected that its primary General Fund unrestricted revenue sources (i.e., property tax, sales tax, transient occupancy tax, franchise tax, documentary transfer tax, and contribution in-lieu of taxes) will generate a combined $88,006,000 in fiscal year 2010-11. If the combined total of actual collections for these revenue sources (as indicated in the General Fund year-end unaudited actual budget status report typically available by August 15)/s more than $1 million greater than this estimate, the City and Miscellaneous Management would meet and confer regarding whether or not the City would agree to reduce the number of furlough hours (or give some other economic increase) for the 2012 calendar year. If the combined total of actual collections for these revenue sources (as indicated in the General Fund year-end unaudited actual budget status report typically available by August 15) is more than $1 million below the $88,006,000 estimate, the City shall have the option of requiring Miscellaneous Management to meet and confer regarding employee compensation (other than any new/2nd tier retirement) and, if the parties could not reach agreement, the City would have the right following good faith meet and confer to impose reductions in compensation (other than any new/2nd tier retirement) to be effective on or after December 25, 2011.

4.

For the MOU year beginning 12/23/12: The following terms and conditions would apply, subject to the contingency set forth below and in paragraph 3 above: There would be no change i n salaries, i.e. a "flat" year on salary.

Agreement on Amendment and Extension to MOU Between City and Miscellaneous Unclassified Management 12126/10 — 12/21/13 Page 4

Employees would take ninety-six (96) unpaid furlough hours by December 21,2013. (See Paragraph No. 2 regarding specifics related to furloughs)
o

A PERS increase in the PERS rate from FY 2011-12 to FY 2012-13 would not adversely impact salaries of Unit 9 employees. The City will pay any increase in the cost of the Kaiser employee only rate for the 2013 calendar year and this increase will not have an adverse effect on the salaries of Unit 9 employees. The Salary Adjustment Form and "Total Compensation" methodology described in Sections 1 and 2 of the 12/08-12/11 MOU would not be used in this MOU year to determine salary (which salary would not change from the prior year) or other element of compensation, and there would be no change to any discretionary allocation from the prior year on the Salary Adjustment Form.

o

o

All other terms and conditions in the 12108-12/11 MOU between the City and Unit 9 would remain in place except as/if needed to be consistent with this Agreement.

o

Contingency Requirement: The City has estimated and projected that its
primary General Fund unrestricted revenue sources (i.e., property tax, sales tax, transient occupancy tax, franchise tax, documentary transfer tax, and contribution in-lieu of taxes) will generate a combined $91,309,000 in fiscal year 2011-12. If the combined total of actual collections for these revenue sources (as indicated in the General Fund year-end unaudited actual budget status report typically available by August 15) is more than $1 million greater Than this estimate, the City and Miscellaneous Management would meet and confer regarding whether or not the City would agree to reduce the number of furlough hours (or give some other economic increase) for the 2013 calendar year. If the combined total of actual collections for these revenue sources (as indicated in the General Fund year-end unaudited actual budget status report typically available by August 15) is more than $1 million below the $91,309,000 estimate, the City shall have the option of requiring Miscellaneous Management to meet and confer regarding employee compensation (other than any new/2nd tier retirement) and, if the parties could not reach agreement, the City would have the right following good faith meet and confer to impose reductions in compensation (other than any new/2nd tier retirement) to be effective on or after December 23, 2012.

Dec 14 ID CI:20p

City.of St a Clara IT Dept 1408241347S

Agreement on Amendment and Extension to MOU Between City and Miscellaneous Unclassified Management 12126110 — 12121113 Page 5

FOR THE CITY:

FORUNIT 0:

Edward

L. Krelsberg, Labor Negotiator „

Dated:

ALA& tt ennijer Spa City Manager Dated: if.21/gh0

Christopher Jackson Dated: ier1/2-4 tO

MEMORANDUM OF UNDERSTANDING
between CI
I

OF

0,

and

Ml3CEL_ANEOU3 UNCLASSIFIED EMPLOYEES LMII 9

DECEMBER 14, 2008 — DECOriBER 24, 2011

MEMORANDUM OF UNDERSTANDING between CITY OF SANTA CLARA and MISCELLANEOUS UNCLASSIFIED MANAGEMENT EMPLOYEES, UNIT #9 DECEMBER 14, 2008— DECEMBER 24, 2011 Table of Contents

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27.

TOTAL COMPENSATION 1 ADJUSTMENT OF TOTAL COMPENSATION 2 CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM 3 DENTAL PROGRAM 3 APPLICATION OF MOU TO REIMBURSED SERVICES 4 HOLIDAYS 4 JOB SECURITY 4 VACATION ACCRUAL AND USAGE 4 5 HEALTH INSURANCE PREMIUMS AUTOMOBILE ALLOWANCE 6 MOBILE COMMUNICATION DEVICE ALLOWANCE 7 NON-RECOVERABLE HEALTH SERVICES/PROFESSIONAL DEVELOPMENT 7 EMERGENCY PAID LEAVE PROGRAM 8 SICK LEAVE/FAMILY SICK LEAVE/PERSONAL LEAVE 10 BEREAVEMENT LEAVE 11 VOLUNTARY EMPLOYEE BENEFICIARY ASSOCIATION (VEBA) 11 RETIREE MEDICAL REIMBURSEMENT BENEFIT 12 EMPLOYEE ASSISTANCE PROGRAM 12 CHANGES TO JOB DESCRIPTIONS 12 LIMITED/ALTERNATIVE DUTY 12 REDUCED WORK WEEKNOLUNTARY TIME OFF (VTO) PROGRAM 14 INDUSTRIAL INJURY/CONTINUATION OF INSURANCE BENEFITS WHILE ON WORKERS' COMPENSATION 14 MANAGEMENT LEAVE PROGRAM 15 FLEXIBLE SPENDING PLAN (INTERNAL REVENUE CODE SECTION 125) 15 DOMESTIC PARTNERS 16 DECLARATION 16 NEXT MEMORANDUM OF UNDERSTANDING 16 APPENDIX A: MOBILE COMMUNICATION DEVICE PROGRAM 18

MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)

Alphabetical Table of Contents

ADJUSTMENT OF TOTAL COMPENSATION APPENDIX A: MOBILE COMMUNICATION DEVICE PROGRAM APPLICATION OF MOU TO REIMBURSED SERVICES AUTOMOBILE ALLOWANCE BEREAVEMENT LEAVE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM CHANGES TO JOB DESCRIPTIONS DECLARATION DENTAL PROGRAM DOMESTIC PARTNERS EMERGENCY PAID LEAVE PROGRAM EMPLOYEE ASSISTANCE PROGRAM FLEXIBLE SPENDING PLAN (INTERNAL REVENUE CODE SECTION 125) HEALTH INSURANCE PREMIUMS HOLIDAYS INDUSTRIAL INJURY/CONTINUATION OF INSURANCE BENEFITS WHILE ON WORKERS' COMPENSATION JOB SECURITY LIMITED/ALTERNATIVE DUTY MANAGEMENT LEAVE PROGRAM MOBILE COMMUNICATION DEVICE ALLOWANCE NEXT MEMORANDUM OF UNDERSTANDING NON-RECOVERABLE HEALTH SERVICES/PROFESSIONAL DEVELOPMENT REDUCED WORK WEEK/VOLUNTARY TIME OFF (VTO) PROGRAM RETIREE MEDICAL REIMBURSEMENT BENEFIT SICK LEAVE/FAMILY SICK LEAVE/PERSONAL LEAVE TOTAL COMPENSATION VACATION ACCRUAL AND USAGE VOLUNTARY EMPLOYEE BENEFICIARY ASSOCIATION (VEBA)

2 18 4 6 11 3 12 16 4 16 8 12 15 5 4 14 4 12 15 7 16 7 14 12 10
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MEMORANDUM OF UNDERSTANDING between CITY OF SANTA CLARA and MISCELLANEOUS UNCLASSIFIED MANAGEMENT EMPLOYEES, UNIT #9 DECEMBER 14, 2008— DECEMBER 24, 2011
In accordance with the provisions of Section 18 of the City of Santa Clara Resolution #2979, entitled "Employer-Employee Relations", this Memorandum of Understanding constitutes the results of discussions between designated representatives of the City Management Staff (City) and the Miscellaneous Unclassified Management Employees of the City of Santa Clara (Unit 9) on all matters within the scope of representation. The term of this Agreement shall be from December 14, 2008 through December 24, 2011. 1.

TOTAL COMPENSATION
A. For the purposes of this agreement, total compensation is defined to include the following items: 1) Salary 2) Fringe Benefits: *These elements are directly a. Retirement (including Social Security)* tied to salary and move as a b. Holiday Pay* function of salary. No c. Vacation Pay* independent movement is d. Insurance allowed in these element (1) Life areas. (2) Health (3) Dental (4) Long-Term Disability (5) Non-Recoverable Health Services/Professional Development (6) Retiree Medical B. For each of the effective years of this Memorandum of Understanding, a base total compensation as defined above, for a Miscellaneous Unclassified Management Employee, will be determined in the following manner: 1) The average control point salary of the Miscellaneous Unclassified Management Employees currently employed will be calculated from the control point salary schedule in effect on the first day of the last full pay period of the preceding calendar year, exclusive of Council Officers. 2) From this average control point salary, a Salary Adjustment Form will be developed to establish the base total compensation for an Unclassified Employee whose total compensation is deemed to be the average of the Unit. C. It will be the prerogative of the Miscellaneous Unclassified Management Employees to allocate the distribution of total compensation monies among the following element areas: 1) Salary, 2) Life Insurance Premiums, 3) Medical Insurance Premiums, subject to the requirement that the amount of the Kaiser single health insurance premium, including the PEMHCA minimum, be included in the mandatory section of the total compensation array, 4) Long-Term Disability Insurance, and 5) Non-recoverable Health Services/Professional Development, except as otherwise noted in this Memorandum of Understanding. Page 1 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)

2.

ADJUSTMENT OF TOTAL COMPENSATION A. YEAR 1 (12/08 — 12/09). Effective the pay period commencing December 14, 2008, for all classifications represented by the Miscellaneous Unclassified Management Employees, the City shall adopt a monthly total compensation schedule (Salary Adjustment Form) using the "average control point salary" of the Miscellaneous Unclassified Management Employees as described in Section 1.B. of this MOU that will increase salary by the average salary increase for the other miscellaneous bargaining groups for the 12/08-12/09 year. If any miscellaneous group reaches agreement on, or has imposed, a salary or total compensation increase for the 12/08-12/09 year after 12/14/08, the Salary Adjustment Form for the Miscellaneous Unclassified Management Employees shall be increased to the new average salary increase for the other miscellaneous bargaining groups, and represented employees effective December 14, 2008, so represented employees will have received the benefit of the average salary increases of the other miscellaneous bargaining groups for the first full year of the MOU. In addition, the Salary Adjustment Form shall at the same time be modified from prior years by only including (i.e. putting "above the line") twenty-five percent (25%) of the City's CalPERS employer contribution instead of fifty percent (50%) and excluding (i.e. placing "below the line") seventy-five percent (75%) of the City's CalPERS employer contribution. The Salary Adjustment Form shall also exclude (i.e. show "below the line") the amount of the City's contribution to retiree health using an actuarial costing methodology. The new Salary Adjustment Form shall reflect the applicable City rates for CalPERS, PEMHCA, Social Security and Medicare. Effective the beginning of the pay period which includes July 1, 2009, the Salary Adjustment Form prepared by the City in December 2008 will be adjusted to reflect the change in the City's CalPERS rate from the period of July 1, 2008 through June 30, 2009 to the period of July 1, 2009 through June 30, 2010. The City will contribute seventy-five percent (75%) of the employer CalPERS retirement rate outside of (i.e. "below the line" on) the Salary Adjustment Form. If the employer CalPERS retirement rate is lower for FY 2009-10 than in FY 2008-09, only the salary and CalPERS contribution elements of the Salary Adjustment Form will change but the total compensation "above the line" on the Salary Adjustment Form will not change. If the employer CalPERS retirement rate is higher for FY 2009-10 than in FY 2008-09, only the CalPERS contribution element of the Salary Adjustment Form will change, and the total compensation "above the line" on the Salary Adjustment Form will increase by the impact of 25% of the increase in the employer CalPERS retirement rate. B. YEAR 2 (12/09 — 12/10). Effective the pay period commencing December 27, 2009, for all classifications represented by the Miscellaneous Unclassified Management Employees, the City shall adopt a monthly Salary Adjustment Form using the "average control point salary" of the Miscellaneous Unclassified Management Employees as described in Section 1.B. of this MOU that will increase salary by the average salary increases for the other miscellaneous bargaining groups for the 12/09-12/10 year. In addition, the Salary Adjustment Form shall be modified by not including (i.e. putting "above the line") any of the City's CalPERS employer contribution instead of seventyPage 2 of 17

MEMORANDUM OF UNDERSTANDING— UNIT #9 (2008-2011)

five percent (75%), and excluding (i.e. placing "below the line") 100% of the City's CalPERS employer contribution. The Salary Adjustment form shall also exclude (i.e. show "below the line") both (1) the amount of the City's contribution to retiree health using an actuarial costing methodology and (2) the City's monthly contributions on behalf of represented employees to VEBA accounts. The new Salary Adjustment Form shall reflect the applicable employer rates for CalPERS, PEMHCA, Social Security and Medicare. YEAR 3 (12/10 — 12/11). Effective the pay period commencing December 26, 2010, for all classifications represented by the Miscellaneous Unclassified Management Employees, the City shall adopt a monthly Salary Adjustment Form using the "average control point salary" of the Miscellaneous Unclassified Management Employees as described in Section 1.B. of this MOU that will increase the total compensation by the average salary increases for the other miscellaneous bargaining groups.. The City will contribute outside of the Salary Adjustment Form used by the City to determine the salary and other adjustments that will result from this total compensation increase: (1) 100% of the employer CalPERS retirement rate; (2) the amount of the City's contribution to retiree health using an actuarial costing methodology;. And (3) the City's monthly contributions on behalf of employees to VEBA accounts. The new Salary Adjustment Form shall reflect the applicable Employer rates for CalPERS, PEMHCA, Social Security and Medicare.

3.

CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
The City has contracted with CalPERS to provide employees with the 2.7% at age 55 formula effective December 17, 2006. For the first year of this MOU commencing on December 14, 2008, the City will contribute seventy-five percent (75%) of the employer CalPERS retirement rate under the enhanced 2.7% at age 55 formula outside of (i.e. "below the line") on the Salary Adjustment Form. Commencing with the second year of this MOU on December 27, 2009, the City will contribute 100% of the employer CalPERS retirement rate applicable under the enhanced 2.7% at age 55 formula outside of (i.e. "below the line") on the Salary Adjustment Form. In addition, in July 2009, represented employees shall not receive a salary decrease as a direct result of an increase in June/July 2009 in the employer CalPERS retirement rate under the 2.7% at age 55 formula retirement contract between CalPERS and the City. The employee's CalPERS retirement contribution will continue to be treated as tax deferred.

4.

DENTAL PROGRAM
Unit 9 agrees to meet with representatives of other City Employee groups for the purpose of determining the amount of money to be contributed by the City to the City of Santa Clara Dental Reimbursement Plan. The Unclassified Management Employees agree that the amount decided upon by the majority of the Employee Representatives will be binding upon the Unclassified Management Employees during the life of this Memorandum. It is understood by the Unclassified Management Employees that any monies contributed to the Dental Reimbursement Plan will be charged to total compensation monies available for allocation. Page 3 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)
5. APPLICATION OF MOU TO REIMBURSED SERVICES
The terms of this Memorandum of Understanding shall not apply to Unclassified Management Employees when such employees are providing their services to another agency that is reimbursing the City of Santa Clara for salary and fringe benefits of such employees. Such arrangements shall be mutually agreed upon between the employee and the City.

6.

HOLIDAYS
The number of annual paid holidays included on the Salary Adjustment Form will be 13 days (computed on the eight hour per day pay rate). Any additional permanent holidays designated by the City Council will be afforded represented employees of Unit 9. However, such holidays will be charged against total compensation. Additional permanent holidays under this section shall be defined as a holiday on which City offices are closed.

7.

JOB SECURITY
Represented members will be compensated at the rate of forty (40) hours salary per year of service to a maximum of six hundred and forty (640) hours should they be terminated from employment for reasons other than cause as defined under Section 6.4 of the Civil Service Rules and Regulations.

8.

VACATION ACCRUAL AND USAGE
Represented employees will be entitled to use vacation as it is earned under the following conditions: A. Vacation may not be taken during the first 6 months of regular employment. B. Vacation will be earned on a bi-weekly basis (1/26 of the yearly accrual) provided that the employee is in a paid status for at least 2/3 of the hours (53.4 hours) of that pay period. C. Accrued vacation time will be paid off regardless of term of employment. D. Annual and maximum vacation accrual rates, calculated to four decimal points for accuracy, are as follows: COMPLETED ANNUAL MAXIMUM

YEARS OF SERVICE
1 through 4 5 through 9 10 through 15 years 16 through 20 21 years +

ACCRUAL
80 hours 120 hours 168 hours 176 hours 192 hours

ACCRUAL
400 hours 400 hours 400 hours 400 hours 400 hours

E. Employees are limited to the maximum accrual of vacation as defined. Employees may temporarily exceed the allowed maximum vacation accrual, subject to the vacation balance as of the end of the pay period which includes December 31st of each year being reduced to the maximum allowable Page 4 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)

accrual. The current vacation balance, the annual accrual and the current pay period usage are all shown on the employees' pay check stub and are the responsibility of the employee to track for compliance with this provision. Vacation that is temporarily allowed to exceed the maximum allowable accrual and is removed from the vacation balance as of the end of the pay period, which included December 31 st of each year, may be donated to the Emergency Paid Leave Fund at the direction of the employee. F. Vacation may be used in one-tenth (1/10th) hour increments. G. Employees who begin work prior to July 1st or continue to be employed after the first calendar year of employment are required to use at least one-half of the vacation accrued during the prior calendar year during the current calendar year. H. Subject to having a sufficient balance of accrued vacation available, an employee may, on a once per year basis, request to be paid at his/her current hourly pay rate for a maximum of 40 hours of accrued vacation if he/she has taken at least one-half (1/2) of the vacation earned in the previous calendar year during the current calendar year. I. Subject to having a sufficient balance of accrued vacation available, a Miscellaneous Unclassified Management employee may, on a once-per-year basis, convert a separate maximum of forty (40) hours of accrued vacation to cash at his/her current hourly rate of pay. In lieu of receiving a vacation-leave cash payout at retirement, the Miscellaneous Unclassified Management Employees may vote to roll accrued vacation leave hours into the employee's VEBA account, subject to Association compliance with Federal rules associated with employee contributions of vacation leave to their VEBA accounts.

J.

9.

HEALTH INSURANCE PREMIUMS
A. Mandatory Health Allocation Kaiser single employee health insurance will be included on the Salary Adjustment Form as a Mandatory Allocation. The amount allocated for Kaiser single employee health insurance will be the premium minus the statutorily required Public Employees Medical and Hospital Care Act (PEMHCA) contribution. The PEMHCA contribution will remain in the Salary Adjustment Form as a separate Mandatory Allocation. The City will change the dollar amount designated within the Salary Adjustment Form for Kaiser single employee health insurance when the premium amount changes annually and/or when the statutorily required PEMHCA contribution changes. B. Discretionary Health Allocation The Miscellaneous Unclassified Management Employees may (on a once-ayear basis, commencing with the beginning of the calendar year) designate within the discretionary portion of the Salary Adjustment Form a fixed monthly sum for all represented employees for employee plus one or full Page 5 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)
family coverage. In order to offset the increase in premium that may be expected during the course of the calendar year, the Miscellaneous Unclassified Management Employees monthly discretionary allocation for health insurance premiums may exceed the cost of the lowest cost family medical insurance premium coverage available to employees who reside within Santa Clara County by an amount not to exceed ten percent (10%) above said premium at the time of the annual allocation of total compensation monies. If the health insurance premium for an individual employee exceeds the amount allocated, the balance is paid by way of a salary deduction from the pay of the individual employee. C. Health Allocation Refund All individual employees having health insurance payments made on his/her behalf that are less than the monthly amount allocated by the Miscellaneous Unclassified Management Employees will have the difference refunded on a once-a-month basis. Such payments shall be made on the first paycheck issued in each month. This refund program requires the following qualifications: 1) it must be a health insurance program; and 2) it must be a health insurance vendor with a current contract with the City through the CalPERS Health Insurance Program. City health insurance coverage will be at the option of the individual employee. It is the intent of this section that employees opting not to have City health coverage will be refunded the full amount allocated on their behalf for health insurance. D. The City shall comply with the provisions of the Family and Medical Leave Act of 1993 (FMLA) and the California Family Rights Act of 1993 (CFRA). 10.

AUTOMOBILE ALLOWANCE
As an alternative to IRS mileage reimbursement or use of a City vehicle, an automobile allowance program will be available to represented employees as follows: A. Department Heads including Assistant City Manager, Deputy City Manager and Deputy Director Redevelopment Agency/Sports & Open Space Authority (Executive Management) shall be entitled to a base monthly automobile allowance of $320 for use of their personal vehicles to conduct City business. Executive Management employees may be eligible to receive an additional amount up to a maximum of $200 per month based on required driving while conducting City business, at the discretion of the City Manager or his/her designee. B. Assistant Department Heads and Division Managers shall be entitled to a base monthly automobile allowance of $200 for use of their personal vehicles to conduct City business. Assistant Department Heads and Division Managers may be eligible to receive an additional amount up to a maximum of $300 per month based on required driving while conducting City business, at the discretion of the City Manager or his/her designee. C. Upon request of the employee, prior to the beginning of each fiscal year, the City Manager or his/her designee will determine whether or not it is appropriate for a manager to receive an amount above the base monthly Page 6 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9(2008-2011)

allowance. The determination will be made based on the requirements for use of the personal vehicles for City business and may require detailed driving information in order to grant an amount above the base monthly amount. This rate adjustment will become effective at the beginning of each fiscal year and will remain in effect for the full year unless there are unique circumstances requiring a modification. D. Prior to the granting of this allowance, all insurance, driver's license, and vehicle registration as required under the State of California Vehicle Code, will be provided by the represented employee, and must be valid and in force at all times employees are operating their personal vehicles on City business. E. Employees receiving the automobile allowance are responsible for all gasoline and maintenance costs. Employees shall also maintain their personal vehicles in a clean and presentable condition while conducting City business. F. A represented employee, who is currently assigned a City vehicle, may choose to continue using that assigned City vehicle in lieu of the automobile allowance. G. The City reserves the right to substitute an assigned City vehicle in lieu of this automobile allowance for a represented employee if it is deemed to be in the City's best interest to provide a City vehicle to conduct City business. H. A represented employee who is currently reimbursed for use of a personal vehicle in accordance with the IRS mileage reimbursement rate, may continue to utilize direct mileage reimbursement, in lieu of participation in this automobile allowance program.

11.

MOBILE COMMUNICATION DEVICE ALLOWANCE
Mobile communication device allowance of $80.00 per month for eligible classifications beginning in the pay period which includes April 1, 2009. Appendix to be added no later than April 1, 2009.

12.

NON-RECOVERABLE HEALTH SERVICES/PROFESSIONAL DEVELOPMENT
Represented employees shall have the right to allocate total compensation monies toward Non-Recoverable Health Services or Professional Development. This program is designed to provide reimbursement to the employee of the cost of services that are not covered as a part of the City's Medical Insurance Program or for non-reimbursed costs incurred as a result of the employee's expenditure in professional activities, organizations, or materials, which are related to his/her position with the City. Monies deposited in this fund shall be distributed to represented employees on or about November 15 of each year subject to the following conditions: A. The right to collect the benefit or a pro-rated amount thereof shall vest on November 15 of each year only for represented employees employed as of that date; except that the right to collect the total benefit shall earlier vest in Page 7 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9(2008-2011)

the case of an Unclassified Management Employee whose service is terminated by death or retirement in which case, it shall vest on such date of death or retirement at which time the benefit also becomes payable. B. For employees entering the Unclassified Service on or after January 1 of each year and who's right to the benefit vests, payment shall be made according to the following table: Entered Service On or After Jan. 1 Feb. 1 Mar. 1 Apr. 1 May 1 June 1 July 1 Aug. 1 Sept. 1 Oct. 1 Nov. 1 Nov. 16 But Before Feb. 1 Mar. 1 Apr. 1 May 1 June 1 July 1 Aug. 1 Sept. 1 Oct. 1 Nov. 1 Nov. 16 Dec. 31 Full Amount 91.7% 83.3% 75.0% 66.7% 58.3% 50.0% 41.7% 33.3% 25.0% 16.7% 0.0% Amount Paid

C. No represented employee shall be entitled to more than the allocation for this benefit in any calendar year. D. Prior to receiving the benefit, the employee or his/her heirs shall file a certificate in a form prescribed by the Finance Department setting forth the taxable status of the benefit. In the event no such certificate is filed, the entire amount of the benefit paid shall be included as "other compensation" on the employee's W-2 form for the calendar year concerned. 13. EMERGENCY PAID LEAVE PROGRAM A. ADMINISTRATION Administration of this program shall be provided by a three (3) member Emergency Paid Leave Board (Board), consisting of two (2) members of the Unit 9 Board and the City Director of Human Resources (or designee). Determination of eligibility to use the vacation established in this Emergency Paid Leave pool will be by majority vote of this board. An adverse decision of this board may be appealed to the Unit 9 Board of Directors and their determination shall be final. B. METHOD OF DONATION 1) Contribution of vacation will be computed at the employee's base hourly rate of pay (excluding premium or specialty pay).

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MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)
2) Contribution may be made from earned vacation, CTO or cash only. Conversion of Sick Leave to Vacation for purposes of donation to this pool will be immediately credited to the pool. 3) In a case where it has become known that an employee has been seriously injured or has a life-threatening illness and is in need of assistance from the Emergency Paid Leave Pool, contributions from accrued Sick Leave, computed at the contributing employee's base hourly rate of pay (excluding premium or specialty pay) may be made for the benefit of that specific employee who has the need. 4) Employee may authorize the City to automatically convert vacation that should be accrued to the employee to the pool when the employee's vacation accrual has reached the maximum allowed. 5) Funds contributed to the Emergency Paid Leave Pool will be placed in an interest bearing Trust Fund. The Trust Fund will be accumulated in total dollars. No record of number of hours contributed to the Pool will be maintained. An employee making a donation to the Pool will not have a vested right to the amount donated. 6) Employees, appointed Council officers, and the elected City Clerk may contribute earned vacation, CTO or cash to the Emergency Paid Leave Pools of other City bargaining groups. C. USE OF POOL 1) Employee must have a verified emergency need for time off to request Emergency Paid Leave from the pool. Medical emergencies for the employee or dependent shall be verified by a doctor's certification and shall include the anticipated duration of the medical emergency. Nonmedical emergencies shall be verified by certification acceptable to the Board and shall include the anticipated duration of the emergency. 2) Employee must have exhausted appropriate paid leave (sick leave including eligible conversion to vacation or vacation) prior to becoming eligible to request emergency paid leave benefits from the pool. 3) The maximum time available from the pool (subject to the assets of the pool) will be 320 hours (four [4] pay periods) for Emergency Paid Leave benefits due to the illness or injury of the employee or the maximum allowable accrual of vacation for emergency needs of the family of the employee. 4) Emergency Paid Leave will be deducted from the pool based upon the employee's base hourly rate of pay (excluding premium or specialty pay). 5) Emergency Paid Leave hours will be made available for use in the pay period following approval by the Miscellaneous Unclassified Management Employees' Emergency Paid Leave Board. 6) Use of Emergency Paid Leave from the pool will be treated in the same manner as use of regular vacation. The employee will continue to accrue Page 9 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9(2008-2011)
sick leave, vacation, insurance coverage and other benefits in the same manner as he/she would if using regularly credited vacation. 7) Emergency Paid Leave, which has been credited to the employee and has not been used when the emergency has terminated will be reinstated to the pool. Vacation, sick leave and other benefits, which have accrued to the employee, will remain in the employee's account. 14.

SICK LEAVE/FAMILY SICK LEAVE/PERSONAL LEAVE
A. SICK LEAVE 1) Employees shall accrue ninety-six (96) hours of sick leave per year of regular City employment. Sick leave shall accrue in equal amounts each pay period. Employees shall not accrue sick leave while they are on unpaid status. 2) Use of sick leave will be under the same terms and conditions as are now in place. Vacation, Unclassified CTO, and Management Leave may be used to supplement sick leave with Department Head approval, as permitted and set forth in CMD 30. B. FAMILY SICK LEAVE 1) Not more than forty eight (48) hours of sick leave within one calendar year shall be granted to any employee for the care or attendance upon members of his/her immediate family, unless the use of additional leave is approved by the City Manager or designee. "Immediate family" is defined as spouse, parent, child, sibling, grandparent, grandchild, aunt, uncle, niece, nephew, first cousin, parent by marriage, step-parent, step-child, grandparent by marriage, son-in-law, daughter-in-law, sibling by marriage, foster parent, domestic partner, anyone residing with employee, or anyone dependent on the employee for care. C. PERSONAL LEAVE 1) Each calendar year, an employee is entitled to use thirty-two (32) hours of accrued sick leave as Personal Leave, provided he/she has sufficient sick leave balance available. 2) Personal leave is intended to provide the employee with paid time off to attend to legitimate personal business that may arise from time to time during the year. Personal Leave may be used to supplement sick leave as required. 3) The employee has an obligation to provide as much notice as possible so as to allow for proper scheduling by the department. 4) Providing that the minimal requirements of proper notification have been met, the use of Personal Leave should not be denied. 5) The adoption of this program does not modify the existing ability of the employee to exchange up to 96 hours of accrued sick leave for up to 48 Page 10 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)
hours of vacation, based upon two (2) hours of sick leave for one (1) hour of vacation as provided and defined in the Personnel and Salary Resolution. 15.

BEREAVEMENT LEAVE
A. The City will provide employees with a paid bereavement leave benefit to attend to the customary obligations arising from the death of a member of an employee's immediate family, as defined in this Section . Employees are eligible to receive up to forty (40) hours of bereavement leave in the event of the death of a parent, child , or sibling of the employee, employee's spouse or employee's domestic partner (including, in each case, step, adoptive and in-law), spouse or domestic partner; up to three (3) work days (regardless of shift assigned) of bereavement leave in the event of the death of a grandparent, grandchild , aunt or uncle of the employee, employee's spouse or employee's domestic partner (including, in each case, step, adoptive and in-law); and up to one (1) work day (regardless of shift assigned) of bereavement leave in the event of the death of a great-grandparent, greatgrandchild, niece, nephew, or first cousin of the employee, employee's spouse or employee's domestic partner (including, in each case, step, adoptive and in-law). B. The bereavement leave benefit is based on each death occurrence and is not charged to the Salary Adjustment Form. C. Up to five (5) work days of additional bereavement leave may be charged to an employee's sick leave balance with City Manager approval. D. At the request of the City, the employee will provide verification.

16.

VOLUNTARY EMPLOYEE BENEFICIARY ASSOCIATION (VEBA)
A. The City established a Voluntary Employee Beneficiary Association (VEBA) trust under Internal Revenue Code Section 501(c)(9) for the purpose of providing a defined contribution post retirement medical benefit for employees. The City previously stopped making contributions to employee VEBA accounts effective December 21, 2003 through December 26, 2009and employee VEBA accounts remained open for other potential contributions. Effective December 27, 2009, the City will contribute $50 per month per represented employee. These contributions shall be made "below the line," on the Salary Adjustment Form (i.e. excluded from calculation of salary adjustments based on total compensation adjustments) but shall be included on Bay Area ERS total compensation surveys. Specific information regarding the Plan is referenced in the Plan Document. B. VEBA is a tax-exempt trust account formed under Internal Revenue Code Section 501(c)(9) designed to accumulate assets to fund the future payment of qualified unreimbursed medical expenses (including specified insurance premiums). At retirement, participants may withdraw the accumulated plan benefits to pay for unreimbursed health insurance premiums, qualified longterm care insurance premiums, and other qualified unreimbursed medical expenses and will not be taxed under current state and federal law. Withdrawals cannot be made for non-medical purposes. Page 11 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)

17.

RETIREE MEDICAL REIMBURSEMENT BENEFIT
A. The Retiree Medical Reimbursement Benefit shall provide each employee who retires from the City with at least ten (10) years of regular City service with a reimbursement for unreimbursed single retiree health insurance premium beginning with the first full month of retirement from City service and ending with the last full month before the retiree's sixty-fifth (65 th) birthday. Starting in the month in which the retiree turns age sixty-five (65), the reimbursement will be for unreinnbursed Medicare single retiree supplemental health insurance premium. For premiums paid in calendar year 2008 that will be reimbursed in 2009, the City will reimburse an amount up to $288 per month, including the PEMHCA minimum, for unreimbursed single retiree health insurance premium or up to $174 per month, including the PEMHCA minimum, for unreimbursed Medicare single retiree supplemental health insurance premium. The amount of the City reimbursement will be adjusted thereafter once each year by the percentage change from October to October in the San Francisco-Oakland-San Jose urban wage earners and clerical workers (W) consumer price index from the prior year, but in no event will be increased more than 3.5%. B. Beginning in 2004, the City will pre-fund this benefit with an amount to be determined by an actuary. C. Each retiree will be required to submit proof of health insurance coverage to the City each year. The City will pay the reimbursement in a lump sum payment each year.

18.

EMPLOYEE ASSISTANCE PROGRAM
The City will provide a confidential Employee Assistance Program for represented employees to be funded outside of the Salary Adjustment Form.

19.

CHANGES TO JOB DESCRIPTIONS
Should the City propose a change of the job description, or should the City propose a new job classification and job description, of any job classification represented herein, the City Manager or designee will provide a copy of that proposed job description to Unit 9 for its review and comment back at least ten (10) work days before it is scheduled to be presented to the City Council for adoption. If the proposed compensation control point of a new classification has been established, the City Manager will also provide that proposed compensation control point to Unit 9 for its comment. For a revision of an existing job description, Unit 9 may include a request that the City Manager review the existing compensation control point for the job classification if there has been a significant change in the duties, responsibilities, or safety hazards of the job classification. The City Manager will give consideration to Unit 9 comments, but the final decision on the job description and compensation control point that is submitted to the City Council for adoption will be made by the City Manager.

20.

LIMITED/ALTERNATIVE DUTY
A. ALTERNATE WORK SCHEDULE (NINE-EIGHTY SCHEDULE) Page 12 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)

A Miscellaneous Unclassified Management employee shall be eligible to work a 9/80 alternate work schedule according to the conditions, criteria, and requirements set forth in City Manager's Directive 71. Requests to work a 9/80 schedule shall be made through or by the Department Head to the City Manager. The City Manager must approve the schedule and the City Manager or Departrnent Head (for employees other than Department Heads) may terminate the schedule at any time. B. JOB RELATED ILLNESS OR INJURY Employees with a job related illness or injury, covered by Workers' Compensation, which prohibits performance of their regular duties, will be reassigned to limited or alternative duty under the following conditions: 1) Supervisors shall be advised of any industrial injury/illness as soon as practical. 2) Upon receipt of a Doctor's report providing work limitations, the City may identify a regular or modified assignment for which the employee has the required experience and training. Such assignment may be on a 40 hour per week or less basis, if mutually agreed between the City and the employee. 3) If the City is unable to identify a limited or alternative duty assignment for which the employee has the required experience and training, the employee will be reassigned to a Monday through Friday work schedule to accommodate required medical or other workers' compensation commitments. C. NON JOB RELATED ILLNESS, INJURY OR CONDITION Employees who have a non job related illness, injury or condition which prohibits performance of the employee's regular duties, may request assignment to limited or alternative duty. Nothing in these provisions is intended to imply that an employee has a right to a limited/alternative duty assignment, unless expressly provided by law. Such request will be accommodated, unless no appropriate limited or alternative duty assignment is available, under the following conditions: 1) Identification by the City of a regular or modified assignment for which the employee has the essential experience and training. Such assignment may be on a 40 hour per week or less basis, if mutually agreed between the City and the employee. 2) Submission of a written release from employee's doctor, subject to review by the City doctor, which allows the employee to perform all of the duties of the contemplated assignment. 3) Employee may account for regular work schedule through a combination of limited or alternative duty hours and sick leave or other paid leave sufficient to maintain eligibility for regular accrual of benefits.

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MEMORANDUM OF UNDERSTANDING — UNIT #9 (2008-2011)

D. WORK WEEK Under both limited or alternative duty assignments employees
will be required to work their regularly scheduled number of hours (normally forty (40) hours) per week, unless such assignment is modified by mutual agreement between the City and the employee. It is recognized that performance of limited or alternative duty assignments will not be permitted to interfere with any medically related treatment designed to assist the employee to return to full, unrestricted duty in the earliest possible time frame.

E. TEMPORARY ASSIGNMENT All such assignments, and their duration, are
temporary assignments and are subject to periodic sixty (60) day review of the employee's continued need for limited or alternative duty, the employee's continued ability to perform the limited or alternative duty and the department's ability to continue the employee in the assignment. All temporary assignments shall be at the employee's regular rate of pay.

F. LAW TO PREVAIL In the event the Americans With Disabilities Act requires
modification of the provisions of this section, it is agreed that the law will prevail. 21.

REDUCED WORK WEEKNOLUNTARY TIME OFF (VTO) PROGRAM
A. EMPLOYEE PARTICIPATION Employee participation in this plan is with the City's understanding and agreement that employee participation cannot be interpreted as anything other than a temporary and limited good faith effort by the employee to help ease the current budget crisis. Participation is not to be construed as a representation of employee commitment to a permanent program or an admission of any kind that the employee would not be harmed by such a plan becoming mandatory. B. REDUCED WORK WEEK/REDUCED PAY Employees may request a reduced work week schedule (32 hours per week instead of 40 hours per week, for example) at the same hourly rate of pay, subject to the following conditions: 1) With the approval of the Department Head and the City Manager, a binding work schedule as requested by the employee will be developed that may be modified only with the approval of both the City and the employee. 2) More than a 20% reduction of the work week in a pay period will result in proportionate reduction of accrual of sick leave and vacation.

22.

INDUSTRIAL INJURY/CONTINUATION OF INSURANCE BENEFITS WHILE ON WORKERS' COMPENSATION
Workers authorized by the City's Workers' Compensation Administrator to undergo therapy or treatment due to an industrial injury, who are required to leave work, shall receive leave with pay, including reasonable travel time, providing the treatment falls within the normal working hours, is pre-scheduled and cannot be scheduled during non-work hours. The City will continue payment toward health, dental and life insurance coverage Page 14 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9(2008-2011)

for the employee and dependents up to the maximum amount allocated under total compensation for an employee who is disabled from work because of a work related injury if the employee is no longer in a paid status sufficient to continue the coverage afforded under the terms of the program, subject to the following conditions: A. The employee may not increase the existing coverage after the date of injury except to add children born within nine months of the injury. B. Continuation toward payment of employee and dependent health/dental/life insurance coverage up to the maximum allocated under Total Compensation is limited to one (1) year from the date of injury. Continuation toward payment of employee health/dental/life insurance coverage up to the maximum allocated under Total Compensation may be extended if the employee continues to be on temporary disability status for a Workers' Compensation injury. C. The employee has supplemented his/her workers' compensation benefit with sick leave, vacation, unclassified CTO, management leave or other paid leave sufficient to qualify for payment of the health/dental/life insurance premium and is no longer entitled to any salary from the City. 23.

MANAGEMENT LEAVE PROGRAM
The Management Leave Program is as follows: A. Effective January 1 of each year, represented employees will be credited with 80 hours of Management Leave per calendar year. B. New hires or employees promoted into Unit 9 between January 1 and June 30 will be credited with 80 hours of Management Leave. New hires or employees promoted into Unit 9 between July 1 and December 31 will be credited with 40 hours of Management Leave. C. Use of Management Leave is subject to approval by the City Manager or his/her designee. Such use shall be approved unless staffing or other conflicts prohibit such approval. D. Management Leave is not charged on the Salary Adjustment Form. E. Management Leave may not be converted to cash or other paid time off. F. Unused Management Leave does not carry over from one calendar year to the next.

24.

FLEXIBLE SPENDING PLAN (INTERNAL REVENUE CODE SECTION 125)
The City will make available a Flexible Spending Plan under the Internal Revenue Code Section 125 for employees. Employees may contribute pre-tax (federal, state, FICA, Medicare) dollars for dependent care and qualified unreimbursed medical expenses. This Plan will follow the regulations outlined by the Internal Revenue Code. Detailed information will be available in the Summary Plan Document. Page 15 of 17

MEMORANDUM OF UNDERSTANDING — UNIT #9(2008-2011)

The City will pay the administrative expenses for the plan. This Plan is voluntary and participating employees will pay the monthly participation cost. The monthly participation cost will be considered pre-tax, as defined above, under Internal Revenue Code Section 106. Participating employees will be provided with an Employee Plan Summary and regular statements regarding the status of their flexible spending accounts.

25.

DOMESTIC PARTNERS
The City shall make all benefit programs available to employees, dependents and domestic partners, subject to the requirements of each benefit provider.

26.

DECLARATION
The parties hereto have reached an understanding concerning the proposed salaries and fringe benefits described in the above paragraphs. All other matters dealing with wages, hours, fringe benefits including health and dental insurance contributions, and working conditions included in ordinances, resolutions, rules or regulations, or previous memorandums of understanding, shall remain unchanged for the term of this memorandum in the absence of agreement to the contrary.

27.

NEXT MEMORANDUM OF UNDERSTANDING
Unit 9 will submit its proposals for a Memorandum of Understanding for the term commencing at the expiration of this Memorandum of Understanding no later than November 2, 2011.

Page 16 of 17

MEMORANDUM OF UNDERSTANDING - UNIT #9 (2008-2011)

FOR THE CITY OF SANTA CLARA MISCELLANEOUS UNCLASSIFIED EMPLOY

Phil Kleinheinz Date:

2

-a_t. oi

APPROVED:

li AA ' , • It ( it 1 AR A LAA.
1 .1ENNIFE - SPARACINO City Manager

-

i

3- D- 641
Date

APPROVED BY THE CITY COUNCIL ON:

December 8, 2008

ATTEST: RODNEY DIRIDON, JR. City Clerk

03-6
Date

Page 17 of 17

APPENDIX A. MOBILE COMMUNICATION DEVICE PROGRAM

INTEROFFICE MEMORANDUM City of Santa Clara DATE: TO: FROM:
March 20, 2009 Unit 9 — Miscellaneous Unclassified Employees Assistant City Manager

2001

SUBJECT: Cell Phone / Smartphone Stipend Program for Unit 9 — Miscellaneous Unclassified Employees Scope: This cell phone / Smartphone stipend program applies only to members of Unit 9 Miscellaneous Unclassified Employees. The stipend amount is $80 per month and commences April 1, 2009 under the conditions described below.

Purpose: To establish policies regarding the provision and usage of City-owned cellular telephones or Smartphones (devices that have voice, data and internet/web access capabilities). The City has determined that it is beneficial to have Unit 9 managers accessible by voice / data communications at all times. A Unit 9 employee can choose to have a City issued cell phone, where the City pays for the Unit 9 employee's cell phone device and service plan through City managed contracts with cell providers, or they can choose to receive a stipend in the amount of $80 per month whereby the Unit 9 employee will purchase and own their cell phone / Smartphone device and pay all service provider charges or the Unit 9 employee can choose to not participate in either of the above programs. Summary: This policy outlines and establishes eligibility criteria for 'Unit 9 employees wishing to receive a monthly cell phone stipend and should be read and understood in conjunction with CMD 11.6-Use of City Resources and Confidential Nature of Information on City Equipment. Cellular Telephone / Smartphone Stipend Program:
Unit 9 employees may chose to receive an $80 a month stipend to purchase, maintain, replace or repair their personal cell phone and pay for any level of cell phone service plan from any provider the employee may select. The $80 per month allowance is not intended to cover the full cost of any particular cell phone device and/or cell phone service plan. If a Unit 9 employee wishes to purchase a cell phone / Smartphone and connect to the City's email system they must confirm with the City's Information Technology Department that the device they wish to purchase can be connected to the City's Outlook email system. Not all cell phone devices or service programs may be compatible with the City's information technology systems. If you d.o not desire to connect to the City's email system then any cell phone or service provider could. be selected. To be eligible for the monthly stipend the Unit 9 employee must provide the Human Resources Department with an active cell phone number. It is expected that the employee will respond to work related calls and most critical, actively monitor their phone during City emergency situations. If a Unit 9 employee participating in the stipend program experiences a lost, stolen or damaged cell phone, it is expected that the employee will actively seek to have the device replaced and/or repaired in a reasonable period of time in order to remain eligible for the

Subject: Cell Phone Stipend Program for Unit 9 — Miseelaeons Unclassified Employees Page 2

monthly stipend (refer to CMD 116 for additional requirements'. if a phone is lost or stolen). The stipend program is focused only to the Unit 9 employee's personal cell phone or Smartphone and not to other cell phones that might be included under a shared or family plan that the employee may have with a service provider. If the Unit 9 employee changes their cell phone number for any reason, the Human Resources Department must be notified in the next work week of the new cell phone number. If an employee receiving a cell phone stipend chooses to no longer use a personal cell phone for any reason, the Human Resources Departnient needs to be notified immediately, and the stipend will be discontinued in the next applicable pay period. The stipend is paid at a rate of $40 per pay period (with no payment on two of twenty-six pay periods annually). A Unit 9 employee starting employment or terminating employment in the middle of any month will receive one-half of the -monthly stipend ($40). The stipend will commence in the first applicable payperiod after the Unit.9 employee's request has been received, reviewed and approved by the Human Resources Department.- The essential review criteria are that the ernployee is a memberof Unit 9 and that the employee has submitted a valid cell phone number as tequested. The stipend is considered inconie to the erriployee and is subject to payroll withholding. CMD .116 — Use of City Resources/Non-Confidential Nature of Information on City Equipment: This CMD addresses key issues related to the ownership and usage of cell phone devices and should always be read and understood in conjunction with this stipend policy. While it is generally the case that call records for a personally owned phone are not subject to public records requests, the law in this area can and does change. CMD 1.16 advises that employees adhere to City policies related to public records and email retention. The City Attorney's Office should be consulted for advice and/or resolution of public records concerns. City Issued Cell Phone Program: A Unit 9 employee can choose to have a City-owned cell phone issued to them in lieu of a monthly stipend. Under this prograin the Information. Technology Department has responsibility for the selection of cell phone devices and cell phone service providers. The City then maintains a record of an employee's cell phone number and usage information. Activity on City-owned cell phones is accessible as a public record. A Unit 9 employee can not have a City-issued phone and a stipend. One or the other must be selected. If you currently have a City-issued cell phone and wish to participate. in the stipend. program you will need to acquire a personal phone and service .plan and then turn in your City issued cell phone. Part of the rationale. fot this program is to decrease the number of City supplied/City supported cell phones through the Use of a stipend program.

Opt Out: A Unit 9 employee can choose to not participate in either the cell phone stipend. program or the City-issued cell phone program. If certain work assignments require the use of a cell phone, that can be accomplished through the temporary provision of a City-issued cell phone through the duration of the. assignment.
Cell Phone / Smartphone Stipend Program Enrollment: A Unit 9 employee can initially enroll in this stipend program by emailing the Human Resources

Subject: Cell Phone Stipend Program for Unit:9 --Miscellaneous Unclassified Employees Page3

Department and requesting partiCipation in the stipend program. You must include your 10digit cell phone number in the ernail, therefore yOu must have aperSotialeell'phoire device and a service plan activated prior to receiv•ng a stipend. Thereafter, the Htiman ReSourc -es Department will present the cell phone stipend enrollment opportunity to new Unit 9 employees, through the process of employee -orientation.

Cc: City Manager

ADMINISTRATIVE CODE

CMD NUMBER 116 DATE: March 9, 2009 CANCELS: November 22,2008

MY MANAGER'S DIRECTIVE-PROCEDURE

USE OF CITY RESOURCES, AND NON-CONFIDENTIAL NATURE INFORMATION ON CITY EQUIPMENT PURPOSE:

OF

The primary purpose of this CMD is to inform all employees that City equipment and system, and City Work locations, as defined herein, are the sole property of the City, and With a few Miner noted eXteptions., are to be used for City Linsiness only. ThiS plity applies to City-owned and issued device S and the use of City network of: systerns uSing City —owned and private devices, including but not limited to . Smartphones.
.

2, Another purpose of this CMD is to inforM all City erriployees that private or personal documents, written Messages, electronic metsages (including text messages, emails, etc:I, materials, information, or files placed in or on City equipment are not private or confidential and may be reviewed to ascertain whether such communications constitute City business, As such, employees should not have any expectation of privacy or confidentiality in any of these circumstances, This CMD does not apply to the confidentiality of personnel records maintained by the Human Resources Department or the Finance Department, or the confidentiality of business and related items within the department where the employee works.

POLICY AS TO CITY-OWNED OR ISSUED DEVICES:

City equipment and systems, and City work loCations, are the sole property of the City and, with Minor exceptions (as noted below in [tern NO. 4 under Supervisor and Department Head Respensibility . and Action), are to he used for City business only. City employees are hereby informed that private or personal documents, written messages, electronic messages (including text messages, ernails, etc.), materials, information or files, placed in or on City equipment are not private or confidential. Employees should not have any expectation of privacy or confidentiality in any of these circumstances. In order to conduct City business, including responding to the needs of citizens and staff, City management and City employees, when directed, may need to access City work locations and equipment of any employee who is absent or unavailable. Access to the work locations and equipment may also be necessary
Page 1 of 9

aria Nunn 116 for purposes of monitoring employee work perforrnance and conduct. Under existing provisions of the law, the City reserves the tight to monitor the use of City equipment for any reason, including the right to review, audit and disclose all matters sent over or stored in City locations or equipment systems to ensure that uses are in compliance with all laws including copyright laws and City policies, including the City Code of Ethics & Values.

POLICY AS TO PRIVATE DEVICES:

Only City approved and authorized Smartphone devices are permitted to access any City network or systems. The approved list of devices are maintained by Information Technology (IT) and listed on the Smartphone Access Authorization Form (form available from IT HelpDesk). A user who connects to City networks via an authorized Smartphone device or service must ensure that all components of hislher wireless connection remain as secure as his/her network access. All Smartphunes and connections to any City network or systems shall be used to conduct City business and utilized appropriately,. responsibly and ethically. All authorized. SmartphOne device and service Users shall, withont exception, Use secure remote access procedures. Enforcement of this provision will be by device passwords in accordance with the City's password policy. Prior to initial use or connection to City networks or systems, authorized Smartphone devices, software and related services must be registered with IT. City employees, contractors, or "as needed" staff in possession of an authorized Smartphone device shall not make modifications of any kind to the device, its software, and/or service that may potentially compromise the integrity of City networks or systems, without the express written approval of IT. This includes, but is not hmited to, split tunneling, dual homing, non•standard hardware or security configurations, etc. Users are advised that applicable law related to public records may require the production of certain records on private devices. Users are advised to adhere to City GM's related to public records and email retention to avoid the potential disclosure of information from their private devices, particularly those users that receive a stipend for private devices. With respect to Public Safety Officers, it is intended that this DAD be read together with the Public Safety Officers Procedural Bill of . Rights.

Page 2 of 6

CMU NUMBER 116

DEFINITIONS:

"City equipment and systeins, and City work locations" is defined herein to include, but not be limited, to, the: follOWing items whether they be owned, bought, Used, paid for, leated, berrovved, or given te areas and the City.: Work spaces, desks, lockers; -City vehiCles, and eq4ment, computer and videoequipment, printers, copiers, supplies, telephones, mobile data terrninals, fax machines, radios, email, text messages, other mail and electronic messaging services, voice mail, and Internet services (as assigned, including chats, newsgroups, and Internet email), or any file.s "City business" includes, but is not limited to, conducting the business of the City of Santa Clara and monitoring employee work performance and conduct. "Off-Duty time" includes employee time before and after work shift, lunch for meal period breaks), and approved vacationfother leave time, "Smartphone" means a mobile handheld device with advanced features like email and Internet capabilities.

RESPONSIBILITY:

AC-PON
Authorize issuance and di:keit:rage misuse of City equipment, tivork lotatiOns,.and Smartplione devices. Approve replacement of lest, Stolen or damaged City-owned. devices. Replacement costs will, be charged to' the user's department, whiCh is then responsiblefor handling reimbursement of City funds with said trser. Replacement and Mainte :nence costs for any perSonal-oWned devices are the sole responsibility of 'the employee.2. Understand that the City's security software for the Internet may record for management use the Internet address or site visited by the employee and keep record of any network activity in which the employee transmits or receives any kind of file; the deletion of a message or file from some electronic systems may not fully eliminate the massage from the system. Understand that "any writing containing information related to the conduct of the public's business, prepared, owned, used or retained by any state or local agency regardless of physical form or characteristics" (Government Code Section 6252) and under some circumstances, communications sent by email, may be subject to disclosure under the Public Records Act or litigation Notwithstanding statements in the CMD to the contrary, occasional use of City equipment by an employee during off-duty time, i.e., typing of a personal letter during the lunch period, or use of a telephone for urgent reasons (see CMD 78), may he granted from time to time at the discretion of
Paoe 3 of 6

DepartMent Heads &
Supervisors

3.

4.

CMD NUMBER 116

and upon the approval of the Department Head. 5. In addition, uses by City employees, during off•duty time, of specific City equipment may also be allowed where certain fees for use of this equipment have been established (i.e., minimal copying, or use of a fax machine, etc.). Managers and supervisors vvh.o are authorized to serve as officers cif a professional Society aricitor associatiOn in accOrdance with CMD 49, and whe have authorized Use . of city resotirCes. in abCddarree Withithe provisiarts of that.CMD,.. shiald riot he .eixpettatieris of ptivaty or confidentiality Of inforthaticin Or files placed oh City equiPMent. Become informed and comply with the policies of this CMD.

6.

All Employeesilisers

7.

a. Do not use City equipment, work locations, or authorized access to City
networks or systems improperly. Improper use includes any personal use for convenience or profit, playing of games, or use to convey derogatory, defamatory, obscene, or otherwise inappropriate actions or messages or any information unrelated to City business. Personal mail, packages, or catalogs should not be received or sent using a municipal address. 9. Employees shall take reasonable measures to safeguard City property and systems to prevent loss or damage. in the event any City-owned or issued device or privately-owned Smartphurie is lost or stolen, or the occurrence of any incident or suspected incident of unauthorized access andier disclosure of City resources, the user shall immediately report such to his/her supervisor and the IT Help Desk. Service will be immediately terminated. Users should immediately report to his/her supervisor and the IT Help Desk if the device is recovered. IT will work with the user to restore service as quickly as possible.

10. The Provisions of this CMD also apply to employee use of non-City issued equipment and systems brought into work locations and used for City business. Employees utilizing non City-issued equipment assume responsibility for the repair or replacement of such equipment, including Smartphones. 11 Nothing in this CMD is intended to or shall be construed as affecting the duty and obligation of City employees to maintain the confidentiality of City documents and information which the employee has access to through his or her employment with the City. It is also not intended to nor shall it be construed as granting access to non-City employees to otherwise confidential City documents and information.

Page 4 of 6

eta UMBER 116 12. Employees should understand that the City' S sectirity softWare for the Internet may record for management use the Internet address or site visited by the employee and keep a record of any network activity in which the employee transmits or receives any kind of files. Any records transmitted or received are recorded and stored in an archive file; deletion of a message or file from some electronic systems may not fully eliminate the message frdm the system. 13. Understand that "any Writing containing information related to the conduct of the public's business, prepared, owned, used or retained by any state or local agency regardless of physical form or characteristics" (Government Code Section 62621 and under some circumstances, communications sent by email, may be subject to disclosure under the Public Records Act or litigation. 14. EmplOyees should understand that the City's network allows Management to access employee passWords. Upon request, employees shall provide their systems passwords to their Department Head to allow access to all files and systems in the employee's absence or as required. Lockers, desk's, files or other secured City equipment, systems, or work locations, may also be accessed by the City. 15. Employees shall not knowingly use City equipment or systems, at City work locations, to download or distribute pirated software or data, or to violate Penal Code Section 502, applicable Federal laws, City policies, rules and regulations, including the City's Code of Ethics & Values. Employees shall not use the City's equipment, systems or work lotations to disrupt or destroy the City's program systems, nor shall they attempt to disable any security system. 16. Violation of this policy, through direct action on the part of the employee, or through carelessness or negligence, may result in formal disciplinary action, up to and including termination, 17. Unit 9 employees should understand that Smartphone devices they obtain through the assistance of an allowance program are considered personal devices and are under the ownership of the employee. All service, maintenance, arid replacement costs are the responsibility:of the empIoyee. 18. Ii reserves the.right to terrrifnate witItotitnetice any authorized: $. rnartphone device, service and access to City network or system that may result in a potential security risk to City network systems, data, users, residents and/or other City assets and resources.

IT D_epartment:

Page 5 of 6

CMITNUMB B

19, IT reserves the right to perforrn a rernote wipe of a users Smartphone, eraSing all data and contentS, if there is a, reaSonable belief that the 'device has been compromised . andler pose a poterttiel seCurity risk to City netinioi'k systems, data, users .Jesiderits -andlei- other city asset and resources. 20, IT will provide minimal support for priVately-owned approved and authorized Srnartphone devices. This support is limited to basic documentation to enable the user to Connect the device to City networks and systems, and basic troubleshooting to determine if any connection problems are on the City side or onside of the City's control, All additional technical and function questionslissues shall bathe responsibility of the user.

Questions regarding this CM may be addressed to the City's Director of Human Resources.

cross Refereme:
Overnight Use of City Vehicles CMD 3 CMD 31 Transaction of Personal Business During Working Hours OW 49 Membership in Professional Societies and Association's CMD 78 - PerSonal Use of City Telephones City Code of Ethics & Values (Attachment to CM0 67, Gifts •& Favors tO [ndiVidUal)

Human

Raaourcea

Interoffice Memorandum
March 20, 2009 To: From:
Subje.ct:

Unit 9 Employees Director of Human Resources Mobile Communications Device Allowance

Per the Unit 9 Unclassified Miscellaneous Management Employees Memorandum of Understanding for 2008-2011., Unit 9 employees are eligible to receive $,80 per month as.a mobile communications device allowance. Please refer to the attached Cell Phone/Smart Phone Stipend Program for Unit 9 --Miscellaneous Unclassified Employees and CMD 4116 for additional, information on the program. Complete the information, below and forward to the:Human Resources Department. I request to participate in the City' :3 mobile CommunicatiOn Device Allowance Program. My mobile phone number is: ( I request to be issued/continue to use a City-issued cell phone.

Signature

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Title

Emp. ID #

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